December 29 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 8% of the projected 2020 gross domestic product (GDP) in the first eleven months, compared to a gap of 3.56% of GDP in the like period of 2019, the finance ministry said on Tuesday.
More than half of the January-November 2020 deficit was due to expenditures aimed at curbing the economic impact of the coronavirus pandemic, the finance ministry said in a statement.
Another reason for the widening of the budget gap was the drop in revenue during the March-November period, as the coronavirus pandemic forced businesses to defer tax payments. At the same time, the government stepped up value-added tax refunds to inject liquidity into the private sector and offered tax discounts to companies and individuals.
The government spent approximately 13.78 billion lei on extraordinary payments related to the pandemic, the finance ministry noted.
The consolidated budget deficit totalled 84.05 billion lei ($21 billion/ 17 billion euro) at the end of November, as revenues fell 2.1% year-on-year to 290.63 billion lei in the first eleven months of 2020, whereas spending rose by 14.8% to 374.69 billion lei.
Total tax revenue increased by an annual 4.5%, with VAT proceeds 9.5% lower.
Amounts reimbursed or granted by the EU totalled 28.5 billion lei in the first eleven months of 2020, up 26.8% compared to the like period of last year.
Investments totaled 41.2 billion lei in January-November, up 24% year-on-year.
In November, the European Commission said that it would not take further steps within the excessive deficit procedure for Romania at that point in time due to the uncertainty caused by the coronavirus pandemic but would reassess the country's fiscal situation next spring.
The finance ministry said last month that the consolidated budget deficit will widen to 9.1% of GDP this year, up from 8.6% forecast previously.
Romania closed 2019 with a consolidated budget deficit of 4.6% of GDP, above the 4.4% ceiling set by the government and the EU's 3% threshold.
(1 euro = 4.8735 lei)